Previously
on MoreLiver’s:
EUROPE
Brussels blog round
up 1 - 7 March – Europp
/ LSE
Ukraine, EPP congress, and
should the EU play a role in Venezuela?
The sharp but
effectual remedy – mainly
macro
If overall fiscal policy was being determined in Brussels rather than by
individual national governments, would it be so very different today? I suspect
we would be seeing similar overall austerity as the ‘Eurozone government’
obsessed with reducing debt. Given their relative competitive positions, that
would mean ‘stability’ in parts of the Eurozone and severe recessions
elsewhere, much as we have now.
The Spitzenkandidats:
EU Parliament Elections Become Explosive – Spiegel
With European Parliament elections scheduled for May, the European
Commission is set to get a new president. Some member states have growing concerns
about the frontrunners -- and now tempers are getting heated.
Thousands of ECB
auditors have begun examining the balance sheets of euro-zone banks. Stress
tests are coming soon. With the European Central Bank in charge of oversight,
many hope the EU's financial industry will return to health. But there are risks.
Currency Positioning
and Technical Outlook: Better Dollar Tone Coming – Marc
to Market
If the past week was about the lack of escalation in both Russia/Ukraine
and China, coupled with the ECB holding pat, next week may see the pendulum
swing back a bit.
The ECB has been too
tight for years – Thomas
Raffinot
Thomas Raffinot on
the eurozone disaster – The
Money Illusion
UKRAINE / RUSSIA
. Sending a signal that both US and EU leaders are seriously considering
such measures under dire contingencies could deter possible escalation of
Russian military engagement in Ukraine. As such, it would
complement current diplomatic efforts to resolve the crisis.
Markets already see a
Putin win – Reuters
An analogy for this Ukraine confrontation is the 1962 Cuban Missile
Crisis. But this time Russia wins.
Russian’s intervention in Crimea and looming threats against eastern
Ukraine underscore Europe’s energy vulnerability.
The country’s creditors may face either a soft debt rescheduling or more
radical haircuts. The risks of austerity, devaluation and continued political
uncertainty all point to the latter.
Gunmen fired warning shots as international observers tried to enter Crimea for a third day and
a Ukrainian border patrol plane came under fire that didn’t cause injuries.
Crimean Crisis All Eyes
on Merkel – Spiegel
As the conflict with
Russia over Crimea intensifies, Germany is playing a central role in communications
with Russian President Vladimir Putin. But the international community has
doubts that Chancellor Angela Merkel can pull it off.
UNITED STATES
FEDERAL RESERVE
Fed’s Lockhart: New Interest-Rate Guidance
Coming Soon – WSJ
Tapering is Sooo 2013 – Tim
Duy’s Fed Watch
Barring the outlier outcomes of either recession or explosive growth,
tapering is on autopilot. Rate guidance is now qualitative and actual policy is
discretionary. Incoming data is interesting for what it says about the timing
of the first rate hike. So far, though,
it is not telling us much given the Fed's belief that weak data is largely
weather related. The degree to which
asset bubbles are a concern varies greatly accross Fed officials but the
general consensus is that such concerns are of second or third order magnitude
compared to missing on both sides of the dual mandate.
Unemployment, Wages,
Inflation, and Fed Policy – Tim
Duy’s Fed Watch
If the Fed follows historical behavior, they will begin tightening
before wages rise and in an environment of low inflation such that inflation
remains stable even as unemployment falls.
In other words, in recent history that have not exhibited a tendency to
overshoot. Explicit overshooting would
represent a very significant shift in the Fed's modus operandi.
Upward
Grind in Labor Markets Continues – Tim
Duy’s Fed Watch
The report has no implications for tapering because
tapering is on a preset course. This one
report by itself also says little about the first rate increase - still mid to
late 2015. But watch the wage growth
numbers and listen to the reaction of Fed officials. In my opinion, this is a key factor in the
timing of rate policy. Traditionally, they start tightening prior or near to an
acceleration in wages.
The Secret History of
the Financial Crisis – Project
Syndicate
Harold James: Though official history portrayed the world's major
central banks as embracing coordinated action to rescue the global financial
system from disaster, the reality is that the Fed played the leading role. In
fact, the Fed has effectively emerged from the crisis as the world’s central
bank, while the IMF has been left on the sidelines.
Fed Missed Crisis Due
To Narrow Mindset, Says Study – WSJ
A rare sociological analysis of Federal Reserve policy argues top
central bank officials missed the oncoming crisis because they failed to make
the connection between housing, the banking industry and the economy.
CHINA
China's
credit markets under pressure – Sober
Look
China Heralding $1.5
Trillion Emerging Debt Wall: Credit Markets – BB
China Gets First Onshore
Bond Default as Chaori Misses Payment – BB
Chinese Exports Collapse Leading To 2nd Largest Trade Deficit On Record –
ZH
Morgan Stanley: Developed World Could be Hit Hard if EM Stumbles – WSJ
OTHER
Press release: Quarterly
Review: Emerging economies respond to market pressure – BIS
BIS Quarterly Review,
March 2014 – BIS
How macro answered
its critics – noahpinion
Jälkeenjääneet maahanmuuttajalapset – Professorin
ajatuksia
Iltalehti
uutisoi lyhyesti, että maahanmuuttajataustaisten ja kantaväestöön kuuluvien
lasten välinen ero Pisa-tutkimuksissa on Suomessa suurempi kuin missään muussa
maassa
http://professorinajatuksia.blogspot.fi/2014/03/jalkeenjaaneet-maahanmuuttajalapset.html
Behind the $100 Billion
Commodity Empire That Few Know – BB
Dunand, 52, and Jaeggi, 53, are executing a plan to propel Geneva-based
Mercuria Energy Group Ltd. nearer to the top independent traders, Glencore
Xstrata Plc, Trafigura Beheer BV and Vitol Group.
http://www.bloomberg.com/news/2014-03-07/behind-the-100-billion-commodity-empire-that-few-know.html
Is the value premium
a liquidity premium? – JP
Konig
Methods to Improve
Decisions – Credit
Suisse
Five Common Mistakes and How to Address Them
Suspected Russian
spyware Turla targets Europe, United States – Reuters
A sophisticated piece of spyware has been quietly infecting hundreds of
government computers across Europe and the United States in one of the most
complex cyber espionage programs uncovered to date.
http://www.reuters.com/article/2014/03/07/us-russia-cyberespionage-insight-idUSBREA260YI20140307
Reading
"Capital": Introduction, continued – The
Economist
Last year Thomas Piketty, an economist at the Paris School of Economics
and a renowned expert on global inequality, published a book titled
"Capital in the Twenty-first Century"—in French. It will be released
in English on March 10th. We reviewed the book earlier this year, but it is
detailed and important enough, in our opinion, to deserve additional discussion.
http://www.economist.com/blogs/freeexchange/2014/03/book-clubs
Equity Investment
Styles
– Copenhagen
Business School
Recent evidence on the existence and cyclicality of investment styles
(Master’s thesis by Christian Jensen-Gaard, June 2013)
OFF-TOPIC
Gen. “Mad Dog” Mattis
just gave what may be the most motivating speech of all time – Military
Times
Private jets' incredible
interiors – The
Telegraph
Inside the gloriously opulent private jets of the world's richest. Thrones,
gold seat buckles and a concert hall: including a prince's 'flying palace' and
Trump's $100m plane. More photos by
Nick Gleis
The Cookie Monster
Knows More About Willpower Than You – Farnam
Street
FINNISH
Euro on vakauden saari ja sen nimi on Japani – Jan
Hurri / TalSa
Euroalue on
vakauden saari ja talous toipuu vailla vaaraa deflatorisesta taantumasta. Näin
uskottelee EKP, joka hallinnoi talousmielikuvia paremmin kuin taloutta.
Mielikuvamarkkinointi ei estä euroaluetta lipsumasta kohti "Japanin
tietä" eikä EKP mahda mitään sillekään, että euromaille tuo tie olisi
paljon karumpi kuin se on ollut Japanille.
Onko Saksalla kanttia Venäjän karhun
kovisteluun? – TalousSanomat
Saksa pystyisi todennäköisesti
talousvalteillaan pysäyttämään Venäjän toimet Krimillä ja Ukrainassa. Vaikka se
voisi tulla maalle kalliiksi.
Guggenheim-hanke: Helsinki ei tiedä, miten se
pääsisi irti sopimuksesta – SK
Poliitikoille
ei ole esitetty varsinaista sopimusta irtisanomisperusteineen.